How should we own our home? – Part II

When a couple, married or not, live in a property which is legally owned by one or both of them, questions can arise as to what their respective beneficial interests are. A simple example will make this clear.

H and W live in their matrimonial home, which is registered in H sole name. But W contributed fifty percent of the purchase price. The law recognises W’s contribution and she will have at least a fifty percent “beneficial” or “equitable” share in the property. In effect, H holds the property on trust for the two of them.

The mechanism by which this conclusion is reached is quite complicated and depends on the application of different types of trusts.

The idea is to discern what the couple’s intentions were when the property was acquired. The fact is that people do not really address this issue at the relevant time except in the most general way. The result is that if an issue arises as to the ownership of the property – because, for instance, one of the parties dies and a third party claims entitlement to his or her estate – the court has to fill the gap and decide what the parties’ respective intentions were when the property was acquired.

The solution is provided by the application of what are called resulting and constructive trusts.

Briefly, in the case of a resulting trust the law presumes what the parties’ intentions were when they acquired the property, by looking at the surrounding circumstances, in particular, their respective contributions to the purchase price. This is referred to as the presumption of a resulting trust. It does not operate if the parties’ intentions were, as a matter of fact, and law, made expressly clear at the time, but this is a fairly unusual scenario.

The point is that there is a presumption against gifts. This if A pays a million dollars for a property and gets it registered in the name of B, there is a presumption that B holds the property on trust for A, unless there is evidence to indicate that a gift was intended; that evidence can be used to rebut the presumption. It is different, though, if B is A’s wife, or child (even adult child). Then there is a countervailing presumption, the presumption of advancement, which can, again, be rebutted by evidence that no gift to the wife or child was intended.

An example might make this clear. In a Court of Appeal decision a few years ago, Lau Siew Kim v Yeo Guan Thye Terence, an engaged couple purchased, as joint tenants, two properties, one the matrimonial home, and the other an investment property. Both parties contributed to the purchases, but not equally. When the husband died, the wife remained the sale registered owner of the properties because of the right of survivorship (explained in Part One). But the husband’s sons from his first marriage claimed that she held both properties on trust for his estate, on a resulting trust. The Court of Appeal disagreed. Although the presumption of a resulting trust was raised by the fact of unequal contributions to the purchase price, it was rebutted by the presumption of advancement in favour of the then fiancee. (The court’s decision was based, inter alia, on its consideration of the nature and quality of the relationship.) They were both legal and beneficial – equitable – joint tenants and the wife was now the sole owner.

Common intention constructive trusts are quite different. With a resulting trust, unless the plaintiff can rely on the presumption of advancement, he – or more probably she – is likely to be limited to a proportionate share of the property based on her contribution to the purchase price.

With the common intention constructive trust, on the other hand, the court examines the dealings and conduct of the parties at the time of the acquisition in order to discern what their common intention was; the party who contributed less may well have acted to his or her detriment on the faith of such a common intention, justifying a bigger “slice of the pie”.

This is an area of law where the Singapore courts have diverged significantly from their English counterparts. In England, the default approach – where the couple have bought a home together as joint tenants – is to presume that their beneficial interests are equal unless there are factors indicating an agreement to share on a different basis, applying constructive trust principles. There is an increasing tendency towards “fairness” – doing justice between the parties irrespective of their financial contributions. The resulting trust, and in particular the presumption of advancement, are thought to be out of step with contemporary social mores.

In Singapore, by contrast, the resulting trust is the default mechanism for resolving disputes concerning matrimonial or quasi matrimonial property. Only in special circumstances will the courts resort to the common intent – constructive trust.

In short, there is a considerable degree of uncertainty regarding the respective interests of cohabiting couples – whether married or not – in residential property that they acquire jointly. It makes sense for such couples, when contemplating the purchase of a property, to seek legal advice as to how they want the property to be divided in the event of same unforeseen event.


How should we own our home – Part I

Wills & Property Planning - Singapore HDB over river

It is a fact of life that most adults get married, or find a partner, and live together as couples.

In an ideal world they will buy a home together, a house, as private apartment or an HDB flat.

Wills & Property Planning, Singapore HDB

For most people, especially in land-scarce Singapore where – even in a depressed market – property prices are very high – their matrimonial home, or the home they share as partners – is likely to be their most valuable asset. How should they own it, and what is to happen when one of them dies?

The first question is one that is rife with legal and social issues. Historically it was not uncommon for the man – the husband – to be the sole breadwinner and for the family home to be in his sole name. That did not mean that the wife did not have what lawyers call a beneficial interest in the property. But it could make it more difficult for her to prove that she had such an interest if the issue became a subject of legal argument. (More about this later.) These days the parties are much more likely to be an equal terms.

I will not be saying anything about divorce. If a married couple get divorced, the court divides up the matrimonial assets which will of course include the home. I am talking about situations where there is no divorce. Instead, the husband or wife dies, or goes bankrupt. Or the couple are living together but not married, or siblings sharing a home. Then it becomes important to determine how the property is owned.


If two or more people own property together, irrespective of whether they are married, they are either joint tenants or tenants in common.


Joint tenants, to the outside world, are like a single person as far as their ownership of property is concerned. They do not have shares in the property; each joint tenant owns the whole thing, together with the other(s). Tenants in common, on the other hand, do own shares in the property: it’s just that those shares have not been physically divided between them.

There is one very important consequence to this apparently subtle difference. When a joint tenant of property dies, the surviving owner – if there is just one – becomes the sole owner. It does not matter that the deceased made a will leaving all his or her property to a third party: that will is ineffective as regards property held on a joint tenancy.

It is different with tenancy in common. Because each tenant in common has a notional “share” in the property, this will pass in accordance with the deceased’s will or the intestacy rules.

Most married couples, and probably most cohabitees, are probably content to own their property as joint tenants, happy to accept that their partner will continue to own the property after he or she has passed on. But the situation does require careful thought.

If there are children, can you ensure that they will inherit the property (if that is what you want)? Not if you are joint tenants. If H and W are joint tenants of their home, and have two children, and H dies, W becomes the sole owner of the (former) matrimonial home. They might each have made wills providing that if he or she, as the case may be, survived his or her spouse, the property would go to the children.

But a will is “ambulatory”: it is only effective on the death of the testator. W might remarry – which would in any event revoke any pre-existing will – and her children with H may end up with no interest in that property.

It would be different if H and W were tenants in common. Then H could leave his share of the property to the children. If the couple are joint tenants they can “sever” the joint tenancy and convert it into a tenancy in common. This way each party can be sure that the children will at least have a share in the property.